This paper studies monitoring in long-term, self-enforcing relationships with adverse selection and moral hazard. Monitoring is used to screen low types by incentivizing them to shirk. Once high types have been identified, monitoring is used both to incentivize effort from high types and to provide off-path (dis)incentives for low types looking to build a reputation. This results in a key trade-off: providing cost-efficient incentives to high types, versus screening low types faster. The optimal contract uses probation after screening: high types are excessively monitored to facilitate better screening. Monitoring declines as the agent's track record improves. (JEL D11, D82, D86)

Rating systems, widely used in online transactions, often reduce buyers' diverse opinions to summary statistics. To explore the consequences of this coarse aggregation, we analyze a dynamic adverse selection model where buyers share anonymous evaluations via a rating system. With heterogeneous buyers, the seller is tempted to secretly lower prices to attract favorable ratings from price-sensitive buyers. That leads to sporadic flash sales. The seller's incentive to manipulate ratings is, however, self-defeating. Our analysis illustrates how the rating system shapes the allocation of surplus and offers insights for platform and product design. (JEL D11, D82, L11, L81)

Common ownership—where several firms are (partially) owned by the same investors—and its impact on product market competition has recently drawn much attention. This paper focuses on its implications for market entry. We consider the entry decisions of generic pharmaceutical firms into drug markets that are opened up by the end of regulatory protection and which were previously dominated by a single firm selling the brand name drug. We find robust evidence that an increase in common ownership leads to a significant reduction in generic entry. (JEL D22, G32, L13, L51, L65, M31)

We study the role of information in Bertrand competition with differentiated goods and heterogeneous production costs. When producers know their costs and consumers know their values, consumer surplus and total surplus are aligned, in the sense that the information and equilibrium that maximize consumer surplus also maximize total surplus. Alignment may fail if consumers do not know their values: Partial information about values makes purchases less efficient but intensifies price competition. We illustrate this within a Hotelling duopoly framework. (JEL D11, D43, D82, D83)

Market design mechanisms are often required to be strategy proof, ensuring that no misreporting is profitable. This, however, may be overly restrictive: Real-world participants may be unable to engage in complex misreporting. In the context of school choice, this paper proposes that mechanisms ought to be immune only to certain “simple” misreports. While no strategy-proof mechanism Pareto improves on the deferred acceptance (DA) mechanism, we find one under our weaker requirement: Kesten's (2010) efficiency adjusted DA (EADA). By extending our criterion to also prevent simple “collective” misreports, we obtain characterizations of Kesten's mechanism. These insights contribute to practical market design. (JEL C78, D47, D82, I21)

Many economic decisions, such as whether to invest in developing new skills, change professions, or purchase a technology, benefit from accurate estimation of skill acquisition. We examine the accuracy of such predictions by having study participants predict the speed at which they will master unfamiliar tasks. Across three studies involving two types of tasks and two levels of difficulty, we find systematic underestimation of learning, even after receiving feedback. In a fourth study, participants predicting others' performance showed significantly less underestimation, suggesting that projection bias—overreliance on immediate perceptions of effort and difficulty—may drive prediction errors. (JEL D83, J24)

A monopolistic seller possesses an inventory containing distinct products, each consumer wishes to buy a single product, and the seller can steer consumers' choices. We fully characterize the producer-consumer surplus pairs induced by market segmentation when the number of products is large. The same characterization holds if the seller cannot price discriminate. We also investigate the relationship between consumer surplus, social welfare, and consumer privacy. Along the Pareto frontier, points with greater consumer surplus can be reached by market segmentations that afford more privacy. (JEL D42, D83, L81)

Should platforms be liable for harms suffered by users? A platform enables interactions between firms and users. Harmful firms impose larger costs on users than safe firms. If firms have deep pockets and are fully liable for harms, platform liability is unnecessary. If firms have limited liability, holding platforms liable for residual harm increases platforms' incentives to raise interaction prices and invest in auditing to deter, detect, and block harmful firms. The social desirability and optimal level of platform liability depend on whether interactions require user consent, the degree to which users internalize harms, and the observability of platform effort. (JEL D21, K13, K22, L81, L82, L86)

This paper studies the design of voting mechanisms. There are multiple alternatives, and the voters have generalized single-peaked preferences derived from median spaces as introduced in Nehring and Puppe (2007b). This class of preferences covers a wide range of economically relevant domains, and it is much larger than the well-known single-peaked preferences on a line. I characterize the welfare-maximizing voting rules among all social choice functions satisfying strategy-proofness, anonymity, and surjectivity. The optimal mechanisms are composed of binary votes on subsets of alternatives involving flexible majority requirements. (JEL D71, D72, D82)